Law:

Section:

[2007] 293 ITR 357 (Madras) HIGH COURT OF MADRAS Commissioner of Income-tax v. Elgi Finance Ltd. P.D. DINAKARAN AND P.P.S. JANARTHANA RAJA, JJ. TAX CASE (APPEAL) NO. 202 OF 2003 JUNE 4, 2007 Section 5 of the Income-tax Act, 1961 - Income - Accrual of â–  Where assessee was a company engaged in the business of leasing finance and hire purchase, interest on 'non-performing assets' was not taxable on accrual basis, as assessee had not shown it in profit and loss account [Assessment year 1998-99] The Assessing Officer noticed that in the profit and loss account for the previous year and in the memo of the total income prepared for income-tax purposes for the year ending thereof, the assessee had not admitted the interest accrued on transactions in respect of hire purchase, leasing, bill discounting, short-term loan etc. So, the Assessing Officer proposed to bring the accrued interest on those items to tax as income of the assessee relating to the assessment year. The assessee submitted that as per the guidelines issued by the Reserve Bank of India, the income pertaining to non-performing assets should not be considered as income. But the Assessing Officer did not accept the submission and made the requisite addition. The Assessing Officer found that the assessee-company was following the mercantile system of accounting and, therefore, both the income as well as the expenditure should be accounted on accrual basis. The Tribunal struck down the addition so made, on the grounds that there was no accrual of income during the year. Held that there was no dispute that the above issue has already been considered by the Madras High Court in CIT v. India Equipment Leasing Ltd. [2007] 293 ITR 350. The Tribunal had given a factual finding that there was no accrual of income during the year. Under these circumstances, especially when the issue was covered by the said and the factual finding given by the Tribunal the order of the Tribunal was in conformity with law. CASE REVIEW CIT v. India Equipment Leasing Ltd. [2007] 293 ITR 350 (Mad.) followed & relied upon. JUDGMENT P.P.S. Janarthana Raja, J.-This appeal is filed under section 260A of the Income-tax Act, 1961, by…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492